Smoke Signals

July 7, 2013

Europe Simulator

Europe Simulator (Photo credit: wigu)

Its odd the suspension of disbelief in Ireland when it comes to the media interviewing of leaders of our bailout and those responsible for the regulation of our banks. The Niberg and the Honahan reports/inquiries as to what caused our banking financial meltdown gave little away, just enough to build up an opaque concealment of banking practices to protect those under cover.

The Anglo tapes on the other hand, show the embarrassing truth of incompetence and casino gambling at its worst as the banks attempted successfully to leverage the state and taxpayers for their losses. Professor Honahan’s interview on RTE radio One news today saw him shrug off the need for his inquiry to get to the level of information provided by the Anglo tapes. Its clear his enquiries yielded about as little for Ireland as his negotiation of our troika bailout did. One might argue his enquiry was purposed to whitewash the Anglo tapes part of what went on with our banks during the tiger boom/bust.

Meanwhile Europe’s bailout economies continue to deteriorate. This is accompanied with claims from the ECB that bailing out countries is not the collective responsibility of the EU but the responsibility of individual governments to fix their own economies. Tales of banking union and of collective approaches such as ESM retrospective bailout of banks eg in Ireland are steadlily receeding.

Germany is doing fine, its own employment rate

(2)”Unemployment Rate in Germany decreased to 5.30 percent in May of 2013 from 5.40 percent in April of 2013. Unemployment Rate in Germany is reported by the Deutsche Bundesbank. Historically, from 1950 until 2013, Germany Unemployment Rate averaged 6.0 Percent reaching an all time high of 14.2 Percent in February of 1950 and a record low of 0.4 Percent in June of 1962. In Germany, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force.”

On the periphery of Europe countries such as Ireland, Portugal, Spain and Greece unemployment rates are from 3 to 6 times Germany’s rate. Once these countries through austerity keep paying back those large troika bailouts, Germany will continue to do fine. The more Germany interferes in the political processes behind bailout in Europe, the more we understand how unwilling Germany is to take up its fair share of the tab. It’s clear in all of this how power has shifted away from smaller members of the EU towards the centre.

Countries whose economies have been market driven in the past are now bailout economies struggling under austerity and transformed into puffs of smoke. The smoke signals to be read from these are not good. Austerity is not working.

“Portugal received a bailout worth more than €78bn  ($102; £67bn) in May 2011, on the condition it implemented austerity measures.” Tough bailout measures are turning peripheral administrations in bailout countries into Sheriff Of Nottingham tax collectors. Its economy under austerity is due to contract by 2.3% this year and a series of resignations have racked its government.

Resignations at the moment mean the Portuguese government can hardly gather a party willing to lead.

In Ireland weak (3) eurozone demand means exports have already dropped by 10% for the year mainly due to fall off in demand from the pharmaceutical industry. Overall exports will llikely slow down by 10% over the year. Its clear banks in Ireland are not yet in a healthy state in Ireland. Personal debt is stifling recovery. Its clear Ireland’s economic condition is deteriorating.

Preparations are being made to deal with the outcome of Europe’s deteriorating economic condition and they do not bode well for taxpayers or for democracy. There has been an uneven distribution of the cost of bailouts with the elite protecting its own interests and the axe falling on the poor. This has led to a swing to the right with more and more democratic rights set aside to favour those who claim the euro to be theirs.

There is growing discontent at Europe’s deteriorating economic situation. (5)”SAN ANTONIO, Sept. 20 /PRNewswire/ — More than two-thirds of Americans live paycheck to paycheck, according to results released today from a survey by the American Payroll Association.”

However, the debt pile and its servicing continues to grow exponentially both in Europe and the US led by growing unemployment, exponential growth in the elderly cohort and their needs, and the growing power of the financial services industry expressed by more distortion and manipulation of the real economy. New economic entities appear by the day, zombie economies.

The question is for how long can central bankers keep juggling zombie balls of smoke in the air before they get blown apart by a light summer brEEze, or worse?

Cyprus shows bank depositors will lose out in subsequent bailouts. Bankers are not happy old money was left intact in depositors accounts in Ireland and elsewhere, is not being spent in the economy out of fear. Insurance guarantees to cover such money will not last long as economic conditions deteriorate and banks want these resources for their own use to cover losses or spend for their gain.

Looked at from afar the FED and central bankers around the world are worried. Democracy is to be feared as an obstacle to their plans to replace the real economy of real market forces with their own virtual economy. Such experiments into currency manipulation last occurred under the USSR and the rouble currency. Its clear where the euro is going.

Those who believe in democratic politics and a government of the people for the people by the people should beware. After their recruitment as Sheriff of Nottingham right-wing austerity parties dismantling social services ‘for the people’ they will become the next turkeys for Xmas and the casinos of financial services industry monopoly economics will play them for the fools they really are.

Losing a raft of government TD’s on a central issue of conscience and morality shows an autocratic lurching to dictatorial compliance unhealthy for democracy. Enda Kenny‘s own goals are now becoming aesthetic moments of indifference to all.

Nero fiddles while Rome burns.







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